By Stephen Varone
Director of Operations, Rand Engineering

In today’s hot real estate market, the pace of renovation and restoration projects is increasing as building owners, managers, and boards of directors look towards repairs and improvements as a means of securing high market value for their properties.

Lobby redesign? New roofing or windows? Restoration of decorative exterior elements? Elevator upgrade? All will improve a building’s appeal and, quite often, operating efficiency. In this unprecedented residential real estate market where prices and rents are soaring ever upward with no end in sight, there is an understandably strong temptation to expedite capital improvements to keep pace. But, determining the what, when, and how much of elective capital improvements is a process best served by long-range planning and budgeting that takes a preventive maintenance program into account and anticipates repairs.

The need for long-term planning is well illustrated by the recent eleventh hour rush to meet the March 1 deadline for facade inspection imposed by Local Law 11/98.

There was an approximately one-year, well-publicized window of opportunity to file a single, comprehensive report on all building walls, including previously excluded walls, in order to comply with the deadline. Yet, many building owners and managers have been scrambling to schedule inspections. With Local Law 11/98’s elimination of the “precautionary status,” many of these same owners and managers will also face mandatory repairs that must be done by the next inspection cycle or risk violations and fines.

The result is that landlords and managers who did not properly anticipate the financial ramifications of Local Law 11/98 may now need to forego other restoration and renovation projects they had planned to enhance their property’s market appeal in order to absorb the cost of mandatory facade and roofing repairs.

It is, of course, not what you know but what you don’t know that will always come back to haunt you. Every building manager knows their building requires pointing–but how many know the correct formula for mortar?

You need to hire experts with the technical knowledge to get the job done right, especially when building owners are looking at the big picture of ongoing maintenance and repair in tandem with an interest in undertaking major capital improvements.

Developing an ongoing relationship with a full-service engineering or architectural firm that is in synch with the building owner’s long-range vision, has the expertise to develop viable budgets and timelines, and can professionally administer every aspect of a capital improvements program is a strategic necessity.

By creating such a partnership, building owners can secure safe, smooth residential building operations while undertaking well-planned capital improvements that increase a property’s appeal and value in a market clamoring for residential product at any price.

This article was originally published in the February 23, 2000 issue of Real Estate Weekly